BP 2006 Annual Report Download - page 214

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5 Creditors continued
The carrying amounts of creditors approximate their fair value.
The profile of the maturity of the financial liabilities included in the balance sheet at 31 December is shown in the table below. These amounts are
included within Creditors – amounts falling due after more than one year, and are denominated in US dollars. $ million
(As restated)
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2006 2005
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Due within
1 to 2 years 714
2 to 5 years 35 37
More than 5 years 15 14
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57 65
6 Pensions
The material financial assumptions used for estimating the benefit obligations of the plans are set out below. The assumptions used to evaluate accrued
pension at 31 December in any year are used to determine pension expense for the following year, that is, the assumptions at 31 December 2006 are
used to determine the pension liabilities at that date and the pension cost for 2007.
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Financial assumptions %
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2006 2005 2004
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Expected long-term rate of return 7.0 7.00 7.00
Discount rate for plan liabilities 5.1 4.75 5.25
Rate of increase in salaries 4.7 4.25 4.00
Rate of increase for pensions in payment 2.8 2.50 2.50
Rate of increase in deferred pensions 2.8 2.50 2.50
Inflation 2.8 2.50 2.50
In addition to the financial assumptions, we regularly review the demographic and mortality assumptions. The mortality assumption reflects best
practice in the UK, and has been chosen with regard to the latest available published tables adjusted to reflect the experience of the group and an
extrapolation of past longevity improvements into the future.
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Mortality assumptions Years
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2006 2005 2004
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Life expectancy at age 60 for a male currently aged 60 23.9 23.0 23.0
Life expectancy at age 60 for a female currently aged 60 26.8 26.0 26.0
Life expectancy at age 60 for a male currently aged 40 25.0 23.9 23.9
Life expectancy at age 60 for a female currently aged 40 27.8 26.9 26.9
The market values of the various categories of asset held by the pension plan at 31 December are set out below.
$ million
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2006 2005 2004
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Expected
long-term
rate of
return
%
Market
value
$million
Expected
long-term
rate of
return
%
Market
value
$ million
Expected
long-term
rate of
return
%
Market
value
$ million
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UK plans
Equities 7.5 22,256 7.50 17,330 7.50 16,263
Bonds 4.7 3,305 4.25 2,231 4.50 2,396
Property 6.5 1,274 6.50 1,085 6.50 1,645
Cash 3.8 334 3.50 896 4.00 402
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7.0 27,169 7.00 21,542 7.00 20,706
Present value of plan liabilities 21,507 18,316 18,613
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Surplus in the plan 5,662 3,226 2,093
Deferred tax (1,671) (968) (628)
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At 31 December 3,991 2,258 1,465